What a factory quote actually covers, how deposits and balances are normally structured, and how to tie payment to delivery rather than trust.
Most first-time importers focus on the unit price and skim the rest of the proforma invoice. The Incoterm, the port, and the payment schedule together determine your real landed cost and how much money is at risk at each stage. This guide covers the conventions you will meet from Vietnamese furniture exporters and where to negotiate.
Know which Incoterm you are being quoted
Vietnamese factories overwhelmingly quote FOB (free on board) at a named port, usually Ho Chi Minh City (meaning Cat Lai) or Cai Mep, and sometimes Quy Nhon or Hai Phong. FOB means the factory pays for inland transport, export clearance, and loading; you arrange and pay for ocean freight, insurance, import clearance, and delivery from the arrival port. EXW (ex works) is cheaper on paper but leaves you responsible for trucking and export paperwork inside Vietnam, which is rarely worth the saving. CIF or CFR quotes include freight to your port and are occasionally offered for convenience, but the factory's freight rate is usually higher than a forwarder's, and CIF insurance is minimal. For most buyers, FOB with your own forwarder gives the best control and the clearest comparison between factories. Always confirm the Incoterm and the port in writing on the proforma invoice, since "FOB" alone is ambiguous.
Understand the standard payment schedule
The default structure is a 30 percent deposit on order confirmation and the 70 percent balance before shipment, paid by telegraphic transfer (T/T) in US dollars. "Before shipment" can mean before loading or against a copy of the bill of lading, and the difference matters: paying against the bill of lading copy means the goods are already on the vessel when you release the balance, which is the better position for the buyer. Factories will often accept this for established customers and sometimes for a first order if you ask. Smaller factories may request 50 percent up front on a first order to cover materials; that is common and not in itself a warning sign, but 100 percent up front is. Letters of credit are accepted by larger exporters and remove most non-delivery risk, but they add bank fees and paperwork on both sides and are usually only worth it above a few tens of thousands of dollars.
Tie the balance to an inspection
The single most useful clause to add is that the balance is payable after a passed pre-shipment inspection. This costs the factory nothing if their quality is good, and it converts your inspection report from advice into leverage. Write it into the proforma invoice alongside the payment schedule, and agree in advance what "passed" means (see our quality control guide). If an inspection fails, you can then negotiate rework, a discount, or a re-inspection with the balance still in your account.
Read the proforma invoice properly
Before paying a deposit, check that the proforma invoice states the Incoterm and port, unit prices and quantities per SKU, packing details, lead time measured from deposit receipt, the full payment schedule, validity period, and the factory's bank details. The bank account name must match the legal entity on the business registration certificate. Invoice fraud through compromised email accounts is a known problem in cross-border trade: if bank details change at any point, confirm by phone with a known contact before sending money, no matter how plausible the email looks.
Reduce exposure on a first order
Keep the first order small enough that losing the deposit would be painful but not fatal, and treat it partly as a paid test of the factory. Once a supplier has delivered two or three orders cleanly, you have a basis to negotiate lower deposits, balance against bill of lading, or in some cases short open-account terms. Trade credit insurance and escrow services exist but are rarely used in furniture at this scale; a well-structured payment schedule and an inspection clause do most of the work.